Camtek Ltd (CAMT) 2021 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to Camtek's First Quarter 2021 Results webinar. My name is Kenny Green, and I'm part of the Investor Relations' team at Camtek. All other than the presenters are currently muted. Following the formal presentation, I will provide some instructions for participating in the live Q&A session. I'd like to remind everyone that this conference call is being recorded, and the recording will be available on Camtek's website come tomorrow. You should have received by now the company's press release and if not, you can review it on the company's website.

女士們，先生們，感謝各位的支持。歡迎各位參加 Camtek 2021 年第一季業績網路研討會。我叫 Kenny Green，是 Camtek 投資人關係團隊的成員。除演講嘉賓外，其他人員目前均已靜音。正式演講結束後，我將提供一些參與現場問答環節的說明。我想提醒大家，本次電話會議正在進行錄音，錄音將於明天在 Camtek 的網站上發布。各位現在應該已經收到了公司的新聞稿，如果沒有，您可以在公司網站上查看。

With me today on the call, we have Mr. Rafi Amit, Camtek's CEO; Mr. Moshe Eisenberg, Camtek's CFO; and Mr. Ramy Langer, Camtek's COO. Rafi will open by providing an overview of Camtek's results and discuss recent market trends. Moshe will then summarize the financial results of the quarter. Following that, Rafi, Moshe and Ramy will be available to take your questions.

今天與我一起參加電話會議的嘉賓有 Camtek 執行長 Rafi Amit 先生、Camtek 財務長 Moshe Eisenberg 先生以及 Camtek 營運長 Ramy Langer 先生。 Rafi 將首先概述 Camtek 的業績並討論近期市場趨勢。隨後，Moshe 將總結本季的財務表現。之後，Rafi、Moshe 和 Ramy 將回答大家的問題。

Before we begin, I would like to remind everyone that certain information provided on this call are internal company estimates, unless otherwise specified. These statements are only predictions and may change as time passes. Statements on this call are made as of today, and the company undertakes no obligation to update any of the forward-looking information contained, whether as a result of new information, future events, changes in expectations or otherwise. Investors are reminded that these forward-looking statements are subject to risks and uncertainties that may cause actual events or results to differ materially from those projected including as a result of the effects of general economic conditions, the effect of the COVID-19 crisis on the global market and other markets in which we operate, including the risk of a continued disruption to our and our customers, providers, business partners and contractors' business as a result of the outbreak and effect of the pandemic, which related to the concentration of a significant portion of Camtek's expected business in certain countries, particularly China, from which we expect to generate significant portions of our revenue for the foreseeable future but also Taiwan and Korea, including the risks of deviations from expectations regarding timing, size of orders from customers in these countries, changing industry and market trends, reduced demand for services and products, the timing development of new services and products and their adoption by the market, increased competition in the industry in price reduction and as well as due to risks and certainties identified in the company's filings with the SEC.

在開始之前，我想提醒大家，除非另有說明，本次電話會議中提供的某些資訊均為公司內部估計。這些陳述僅供參考，可能會隨著時間的推移而改變。本次電話會議中的陳述截至今日為止，本公司不承擔更新任何前瞻性資訊的義務，無論其是否因新資訊、未來事件、預期變更或其他原因而更新。提醒投資者，這些前瞻性陳述受風險和不確定因素的影響，可能導致實際事件或結果與預測存在重大差異，包括一般經濟狀況的影響、COVID-19 危機對全球市場和我們經營的其他市場的影響，包括由於疫情的爆發和影響，我們和我們的客戶、供應商、業務合作夥伴和承包商的業務可能繼續中斷，這與 Camtek預計業務的很大一部分集中在某些國家/地區有關，特別是中國，我們預計在可預見的未來將從這些國家/地區產生很大一部分收入，但也包括台灣和韓國，包括時間安排、這些國家/地區客戶訂單規模與預期存在偏差的風險、行業和市場趨勢的變化、對服務和產品的需求減少、新服務和產品的開發時機及其市場上的風險

Please note that the safe harbor statement in today's press release also covers the contents of this conference call. Furthermore, during this call, certain non-GAAP financial measures will be discussed. These are used by management to make strategic decisions, forecast future results and evaluate the company's future performance. We believe that the presentation of non-GAAP financial measures are useful to investors' understanding and assessment of the company's ongoing cooperation and prospects for the future. A full reconciliation of non-GAAP to GAAP financial measures are included in today's earnings release. And with that, I'd now like to hand over the call to Rafi Amit, Camtek's CEO. Rafi, please go ahead.

請注意，今天新聞稿中的安全港聲明也涵蓋了本次電話會議的內容。此外，本次電話會議也將討論一些非公認會計準則 (non-GAAP) 財務指標。管理層將使用這些指標來制定策略決策、預測未來績效並評估公司未來表現。我們認為，非公認會計準則 (non-GAAP) 財務指標的呈現有助於投資者了解和評估公司目前的合作和未來前景。今天的收益報告中將包含非公認會計準則 (non-GAAP) 和公認會計準則 (GAAP) 財務指標的完整對照表。現在，我想將電話交給 Camtek 執行長 Rafi Amit。 Rafi，請開始。

Thanks, Kenny. Good morning, and thank you for joining our call today. High demand in our markets, excellent performance of our systems and the strong position that Camtek has gained in the market allow us to continue demonstrating record financial performance quarter after quarter. We ended the first quarter of 2021 with $57.4 million revenue, 51% gross margin and 27% operating margin. The impressive profitability is a result of a rapid increase in sales and favorable product mix.

謝謝，Kenny。早安，感謝您今天參加我們的電話會議。市場需求旺盛，系統性能卓越，以及 Camtek 在市場上佔據的強勢地位，使我們能夠連續幾個季度保持創紀錄的財務業績。截至 2021 年第一季度，我們的營收為 5,740 萬美元，毛利率為 51%，營業利潤率為 27%。令人印象深刻的獲利能力得益於銷售額的快速成長和良好的產品組合。

Before I review the first quarter, I would like to give a brief overview of the market environment. We are experiencing demand from all territories and especially from Asia. We expect to continue showing an increase in sales in the next 2 quarters. Our revenue guidance for the second quarter is $63 million to $65 million. There are several market trends driving the demand for semiconductor component and for our systems. The demand for products such as laptop and tablet that had been stabilized before COVID-19 has increased due to working from home. Working from home has also led to heavy investment in data center, cloud and communications infrastructures.

在回顧第一季之前，我想先簡單介紹一下市場環境。我們正經歷來自所有地區，尤其是亞洲的需求。我們預計未來兩季的銷售額將持續成長。我們對第二季的營收預期為6300萬至6500萬美元。一些市場趨勢推動著對半導體元件和我們系統的需求。由於居家辦公室的興起，筆記型電腦和平板電腦等產品的需求在新冠疫情之前已經穩定下來，而現在則有所增長。居家辦公也帶動了對資料中心、雲端運算和通訊基礎設施的大量投資。

The massive amount of data that is sent and stored in the cloud is driving demand for advanced memory, AI devices and high-performance computing. 5G cellular communications has been adopted by the market earlier than expected resulting in high demand for electronic components. 5G cellular phones contain more RF devices, cameras and advanced packaging compared with the previous generations, thus requiring more inspection and metrology of all components.

雲端發送和儲存的大量數據正在推動對高階記憶體、人工智慧設備和高效能運算的需求。 5G蜂窩通訊的市場普及速度快於預期，導致對電子元件的需求激增。與前幾代產品相比，5G手機包含更多的射頻設備、相機和先進封裝，因此需要對所有組件進行更嚴格的檢測和計量。

The automotive industry is also undergoing major changes with the shifting to electric cars and advanced driver assistant systems. Technologies, resulting in demand for extensive electronic components. These components must meet 0 defect policy requiring 100% inspection of all components in cars. We see adoption of high-end advanced packaging in new devices as the industry is driving smaller geometric and using heterogeneous integration to deliver products with higher performance and lower power consumption. We are a major player in this space and we expect to expand our business as the industry is implementing new applications with high-end advanced packaging.

隨著汽車產業向電動車和高級駕駛輔助系統 (ADAS) 技術的轉變，汽車產業也在經歷重大變革，這導致對大量電子元件的需求激增。這些元件必須滿足零缺陷政策，即對汽車所有元件進行 100% 的檢測。隨著產業不斷追求更小尺寸和使用異質整合來提供更高性能和更低功耗的產品，我們看到高端先進封裝在新設備中的應用。我們是該領域的主要參與者，隨著行業正在利用高端先進封裝實現新的應用，我們期待業務的擴展。

Regarding Q1 highlights. 88% of our sales came from Asia, with China being the largest territory. 50% of our installed system are for advanced packaging applications, which is expected to continue growing in the coming quarters. Other applications in which we play a major role are compound semi, MEMS, CIS, RF and macro defect inspection in the front end. During the quarter, we delivered multiple systems order to several Tier 1 customers as well as single system order to over 20 customers. We continue to execute well under the COVID-19 circumstances. Most of our employees in Israel are vaccinated and returned to work from office, which will no doubt, improve our overall efficiency.

關於第一季的亮點，我們88%的銷售額來自亞洲，其中中國是最大的市場。我們已安裝的系統中有50%用於先進封裝應用，預計未來幾季將持續成長。我們在其他應用領域也發揮著重要作用，包括化合物半導體、MEMS、CIS、RF和前端的宏觀缺陷檢測。在本季度，我們向多家一級客戶交付了多套系統訂單，並向20多家客戶交付了單套系統訂單。在新冠疫情期間，我們依然表現良好。我們在以色列的大多數員工都已接種疫苗並已返回辦公室工作，這無疑將提高我們的整體效率。

To summarize, high demand for semiconductor components has been leading to an increasing demand for inspection systems. Camtek can provide its customers with reliable, high-performance systems tailored to their special requirements. Camtek is strongly positioned in the market and as things stand today, we expect 2021 to be an exceptional record year in sales, growth and profitability.

總而言之，半導體元件的高需求帶動了檢測系統的需求不斷增長。 Camtek 可為客戶提供可靠、高效能的系統，以滿足其特殊需求。 Camtek 在市場上佔據強大的地位，就目前情況而言，我們預計 2021 年將在銷售額、成長和獲利能力方面創下歷史新高。

I would like to hand over to Moshe for a more detailed financial discussion of the financial results. Moshe?

我想把時間交給 Moshe，讓他對財務結果進行更詳細的財務討論。 Moshe？

Thank you, Rafi. In my financial summary ahead, I will provide the results on a non-GAAP basis. The reconciliation between the GAAP results and the non-GAAP results appear in the tables at the end of the press release issued earlier today. First quarter revenues came at a record $57.4 million, an increase of 90% compared with the first quarter of 2020 and 80% compared with the previous quarter. Assuming the mid-range of our Q2 guidance, we expect the revenue in the first half of 2021 to be 80% higher than the same period last year. Gross profit for the quarter was $29.1 million. The gross margin for the quarter was 50.7% versus 45.2% in the first quarter of last year and 48.2% last quarter.

謝謝，拉菲。在接下來的財務摘要中，​​我將提供非公認會計準則 (Non-GAAP) 的績效。 GAAP 業績和非 GAAP 業績之間的對帳表已在今天早些時候發布的新聞稿末尾的表格中列出。第一季營收達到創紀錄的 5,740 萬美元，較 2020 年第一季成長 90%，較上一季成長 80%。假設我們第二季業績指引的中位數，我們預期 2021 年上半年營收將比去年同期成長 80%。本季毛利為 2,910 萬美元。本季毛利率為 50.7%，去年第一季為 45.2%，上季為 48.2%。

The improvement in the gross margin was due to the significant growth in revenues as well as more profitable product and sales mix this quarter. Operating expenses in the quarter were $13.5 million. This is compared with $10 million in the first quarter of last year and to the $14.2 million reported in the previous quarter. The decrease from the previous quarter is mostly due to a more favorable sales channel mix. Operating profit in the quarter was $15.6 million compared to the $3.7 million reported in the first quarter of last year. Operating margin was 27.2% compared to 12.2% in the first quarter of last year and 18.9% last quarter.

毛利率的提升得益於本季營收的大幅成長以及產品和銷售組合的獲利能力增強。本季營運費用為1350萬美元，而去年第一季為1000萬美元，上一季為1420萬美元。環比下降主要源自於更有利的銷售通路組合。本季營運利潤為1560萬美元，而去年第一季為370萬美元。營運利潤率為27.2%，而去年第一季為12.2%，上一季為18.9%。

The rapid growth in revenue, while we are still in the process of adjusting our expense structure to support this increased business volume, contributed to the high operating margin. Yet, I expect that our operating profitability will be ahead of our model. Net income for the first quarter of 2021 was $14.6 million or $0.33 per diluted share. This is compared to a net income of $3.6 million or $0.09 per share in the first quarter of last year. Total diluted number of shares as of the end of Q1 was 44.5 million shares.

儘管我們仍在調整支出結構以支持業務量的成長，但營收的快速成長促成了較高的營業利潤率。然而，我預期我們的營業獲利能力將高於我們的模式。 2021年第一季淨利為1,460萬美元，即每股攤薄收益0.33美元。相較之下，去年第一季的淨利潤為360萬美元，即每股攤薄收益0.09美元。截至第一季末，稀釋後股份總數為4,450萬股。

Turning to some high-level balance sheet and digital metrics. Inventory level went up by $5 million to support the continued growth expected in the coming quarters. Accounts receivables went up by $13.5 million due to the increased sales and timing of collection. We generated $2.7 million in cash from operations in the quarter. This quarter's cash flow was affected by the above-mentioned working capital requirement. Net cash and cash equivalents and short-term deposits as of March 31, 2021, were $169.9 million. And together with the $10 million that we have in long-term deposits, the total cash and deposits amounted to $180 million. This compared with $177.8 million at the end of 2020. With the current business momentum, we expect revenues of $63 million to $65 million in the second quarter. And with that, Rafi, Ramy and myself will be open to take your questions. Kenny?

轉向一些高階資產負債表和數字指標。庫存水準增加了 500 萬美元，以支持未來幾季預期的持續成長。由於銷售額增加和收款時間安排，應收帳款增加了 1,350 萬美元。本季我們從經營中產生了 270 萬美元的現金。本季的現金流量受到上述營運資金需求的影響。截至 2021 年 3 月 31 日的淨現金及現金等價物及短期存款為 1.699 億美元。加上我們擁有的 1,000 萬美元的長期存款，現金和存款總額達到 1.8 億美元。而 2020 年底為 1.778 億美元。按照目前的業務勢頭，我們預計第二季營收將在 6,300 萬至 6,500 萬美元之間。然後，Rafi、Ramy 和我很樂意回答您的問題。 Kenny？

(Operator Instructions) Our first question will be from Craig Ellis of B. Riley.

（操作員指示）我們的第一個問題來自 B. Riley 的 Craig Ellis。

Congratulations on the very strong first quarter results and second quarter outlook team. I'll start with a clarification just on to income statement items. Moshe, for operating expense, you talked about expanding to support growth in the business. How quickly can operating expense dollars expand? And then secondly, related to the income statement, very nice gross margin improvement. And with the increase in the second quarter, should we expect the volume part of the gross margin drivers to mean that gross margin could even expand further in 2Q?

恭喜你們第一季業績強勁，第二季前景展望也十分出色。首先，我先來澄清一下損益表項目。 Moshe，關於營運費用，您提到要擴大規模以支持業務成長。營運費用的成長速度能有多快？其次，與損益表相關的是，毛利率的提升非常顯著。隨著第二季毛利率的成長，我們是否應該預期毛利率驅動因素中的銷售部分會進一步提升？

Okay, Craig. So I'll start with the second question. With respect to the gross margin, overall, indeed, the business volume contributed to the improved gross margin. Also, the product mix was very favorable this quarter. We believe that the company can operate within this magnitude in the next few quarters. So we are talking between 50% to 52% gross margin in the coming quarters.

好的，Craig。我先回答第二個問題。關於毛利率，整體而言，業務量確實推動了毛利率的提升。此外，本季的產品組合也非常有利。我們相信公司未來幾季的營運能夠維持這一水平。因此，我們預計未來幾季的毛利率將在50%到52%之間。

With respect to our operating expenses, obviously, with the increased volume will increase operating expenses to support it. The main item that will be increased is R&D, obviously, as well as sales and marketing, which has direct relationship to the business volume and sales channel, whether we are working direct or indirect has a major impact on the operating expenses. So it will go up but not significantly in the coming quarter. So such that we expect operating profitability to remain high this year.

至於我們的營運費用，隨著銷售量的成長，營運費用顯然也會隨之增加。主要增加的項目顯然是研發費用，以及銷售和行銷費用，這些費用與業務量和銷售管道直接相關。無論我們是直接還是間接銷售，都會對營運費用產生重大影響。因此，下個季度營運費用會增加，但幅度不會太大。因此，我們預計今年的營運獲利能力將保持在高位。

That makes sense. And then the first real question is for Rafi. Rafi, I think I heard in your prepared remarks an expectation for the third quarter's revenues to increase sequentially. So the question is really twofold. One, given the trailing 5-quarter average sequential revenue gains have been around $6 million or $7 million, is that a reasonable expectation for the third quarter? And where do you have comparatively higher visibility in your business for the third quarter and the back half of the year across CMOS Image Sensors, Front-End Macro Inspection or High-Bandwidth Memory?

這很有道理。那麼第一個真正的問題是問拉菲的。拉菲，我想我從你的準備好的發言中聽到了你對第三季收入將環比增長的預期。所以這個問題其實有兩個面向。首先，考慮到過去五個季度的平均環比收入增長約為600萬或700萬美元，這對第三季度來說是一個合理的預期嗎？其次，在CMOS影像感測器、前端微距偵測或高頻寬記憶體方面，你們在第三季和下半年哪些業務的可預見性相對較高？

I can tell you, in general, as we said, we can see continue growing in second quarter and also in the third quarter, I believe we can see a few million each quarter growth rate. Regarding the type of applications, as we said before, in general, the advance packaging is the major one. But all of them, we -- as we mentioned before, we can see compound semi, CMOS Image Sensors, RF, MEMS, all of them continue about in the same level.

我可以告訴你，總的來說，正如我們之前所說，我們可以看到第二季和第三季的銷售額繼續成長，我相信每季的成長率都能達到數百萬。至於應用類型，正如我們之前所說，一般來說，先進封裝是主要的。但所有這些，正如我們之前提到的，我們可以看到化合物半導體、CMOS影像感測器、射頻(RF)、微機電系統(MEMS)，它們都保持著大致相同的水平。

That's helpful. And then finally for me, the company has a very substantial cash balance of $180 million, including $10 million in securities. So the question is, how are you thinking about redeploying that to create value? I know in a COVID world, it's hard to get out and do the things that are needed, that are often precedent actions to M&A. But can you just express how you're looking at activating that cash for creating further value for shareholders?

這很有幫助。最後，對我來說，公司擁有1.8億美元的巨額現金餘額，其中包括1000萬美元的證券。那麼問題是，您打算如何重新部署這些現金來創造價值？我知道在新冠疫情期間，很難抽身去做一些必要的事情，而這些事情通常是併購的先決條件。您能否簡單談談您打算如何啟動這些現金，為股東創造更多價值？

Okay. Look, we invest a lot of efforts of searching for available companies for M&A. I would say that assuming we -- eventually, we find a good company, hopefully we can visit, we can make due diligence, and we can come to decision. This is something that is unclear at this point. It's depending where some territory, you can fly, you can visit. Some of them, you cannot do it. So we don't know yet. We have few potential company that we consider. And definitely, this is one of our strategy to do it, and we invest a lot of efforts. But it's too early to say something. I would say when we find a company, when we start the process, we will share it with the public.

好的。你看，我們投入了大量精力尋找可供併購的公司。我想說，假設我們最終找到了一家不錯的公司，希望我們能夠去實地考察，進行盡職調查，然後做出決定。目前情況尚不明朗。這取決於哪些地區可以飛行，哪些地區可以實地考察。有些地區則無法飛行。所以我們還不確定。我們目前考慮了一些潛在的公司。當然，這是我們的策略之一，我們也投入了大量精力。但現在下結論還為時過早。我想說，當我們找到一家公司，啟動流程時，我們會與公眾分享。

Okay. Our next question will be from Charles Shi of Needham.

好的。下一個問題來自 Needham 的 Charles Shi。

Can you hear me?

你聽得到我嗎？

Yes, we can.

是的，我們可以。

So I wanted to ask a slightly longer-term question. So a little bit looking beyond 2021 into 2022. So, first, let me start with your memory business. One of your largest memory customer, yesterday announced that they are pulling in 2022 CapEx into '21. And the decision was kind of made near the end of last month. And I know you've been expecting memory revenue, which has been quite muted since last year, could pick up as early as the end of this year or first half '22. Do you see any of the pull-ins, I mean, maybe not specifically from this customer, but the overall DRAM or memory in general into the second half this year.

所以我想問一個稍微長遠的問題。展望一下2021年之後到2022年的情況。首先，讓我先從你們的記憶體業務說起。你們最大的記憶體客戶之一昨天宣布，他們將把2022年的資本支出納入2021年。這個決定是在上個月底做出的。我知道你們一直預計，自去年以來一直低迷的內存收入最快可能在今年年底或2022年上半年回升。你們認為今年下半年的內存收入會回升嗎？我的意思是，可能不是專門來自這個客戶，而是整個DRAM或記憶體業務。

Ramy, would you like to answer, please?

拉米，你願意回答嗎？

Yes, I will answer. Look, Charles, in general, we see a lot of activity in this space, and we're working very closely with our customers. And I expect that there will be business. I still believe it will only happen starting early next year, if there will be any (inaudible) , of course, we will be able to accommodate it. So -- but I'm not sure we will see it in the second half, I believe it will be -- if any, it will be very late this year, early next year.

是的，我會回答。查爾斯，總的來說，我們看到這個領域有很多活動，我們正在與客戶密切合作。我預計會有業務。我仍然認為這要到明年年初才會發生，如果有任何（聽不清楚）的話，當然，我們能夠滿足。所以——但我不確定我們是否會在下半年看到它，我相信——如果有的話，那也會在今年晚些時候，也就是明年年初。

Okay. Ramy. So it looks like there's -- at least for now, there's no change in terms of the outlook for your memory side of the business. So I forgot to...

好的。拉米。所以看起來——至少目前，你們記憶體業務的前景沒有改變。所以我忘了…

No change.

沒有變化。

Great. So maybe let me move on to the other major segment, market segment for you guys CMOS Image Sensors. I put you -- Rafi you did say you expect the revenue will maintain at about the same level throughout this year, very steady, stable and continue the strength. I wonder whether you're seeing any signal for 2022, whether investment level for CMOS Image Sensors can up -- go up again next year. I think the one thing we did see here, one of the largest CIS customers told me last night that it did an update on their long-term -- mid- to long-term CapEx, and think they are raising their CapEx up by 25% for the next 3 years relative to the previous 3-year period.

好的。那麼，讓我來談談你們的另一個主要細分市場，CMOS影像感測器。 Rafi，您確實說過，您預計今年的收入將保持大致相同的水平，非常穩定，並且會繼續保持強勁勢頭。我想知道您是否看到了2022年的任何訊號，CMOS影像感測器的投資水準明年是否會再次上升。我認為我們在這裡看到的一件事是，最大的CIS客戶之一昨晚告訴我，他們更新了他們的長期（中長期）資本支出，並認為他們將在未來3年將資本支出相對於前3年提高25%。

I wonder, is it the right expectation for us to see your CIS revenue to go back to the 2020 level or close to that level next year, and which means year-over-year growth from this year's level.

我想知道，我們是否正確預期您的 CIS 收入明年將回到 2020 年的水平或接近該水平，這意味著比今年的水平實現同比增長。

So, first of all, this year level is not low. We will see about 10% of our revenues significantly decrease compared to last year. So 10% of the business this year will go to CMOS Image Sensors. And it's very hard to say at this stage whether we will see the increase or what is the magnitude of the increase. In general, we're speaking with several customers. They are all talking about adding capacity for the foreseeable future need late this year, beginning of next year. So I do expect that '22 will be a positive year for the sales in sensors, whether it will reach last year, it's hard to say, but definitely, it will be a positive year for this segment.

首先，今年的水平並不低。與去年相比，我們的收入將大幅下降約10%。也就是說，今年10%的業務將流向CMOS影像感測器。目前很難預測我們是否會看到成長，或成長幅度有多大。總的來說，我們正在與幾位客戶溝通。他們都在討論在今年年底或明年年初增加產能以滿足可預見的未來需求。因此，我確實預計2022年將是感測器銷售成長的一年。至於能否達到去年的水平，很難說，但毫無疑問，這將是該領域成長的一年。

My last question. We know we're talking about potential upside for memory, potential upside for CMOS Image Sensors. On your advanced packaging side of your business, definitely, this year is very, very strong. And I think some of the concern, I mean, more pessimistic people would think maybe your business on that side of advanced packaging side could be peaking. Obviously, you have a very well diversified business. You have posted 7 consecutive year of growth because of your diversified exposure to different end markets; however, specifically on advanced packaging, I wonder, what your early view about 2022 slide at this point of time?

我的最後一個問題。我們知道我們正在談論記憶體的潛在上漲空間，CMOS影像感測器的潛在上漲空間。貴公司先進封裝業務今年的表現無疑非常非常強勁。我認為一些擔憂，我的意思是，更悲觀的人可能會認為貴公司先進封裝業務可能已經達到頂峰。顯然，貴公司的業務非常多元化。由於貴公司對不同終端市場的多元化佈局，貴公司已經連續7年實現成長；然而，具體到先進封裝業務，我想知道，就目前來看，您對2022年業務下滑的初步預測是什麼？

Well, if we look from what we talk with our customers and what we look at understanding the trades, definitely, we believe that the advanced packaging will continue to grow in the foreseeable future, meaning in the next few years. Now one of the major additions integration. Which is primarily today for high-performance computing. But definitely, this is a trend, Rafi mentioned it in the script. So we believe that this market continues to grow. There are a lot of new devices that are adopting advanced packaging for all the good reasons.

嗯，如果我們從與客戶的溝通以及對產業的了解來看，我們確信先進封裝在可預見的未來，也就是未來幾年，將繼續成長。現在，主要的新增功能之一是整合。目前，它主要用於高效能運算。這無疑是一個趨勢，Rafi 在演講稿中提到了這一點。因此，我們相信這個市場將持續成長。許多新設備都出於各種原因而採用先進封裝。

So if today, most of the business is spending or packaging and fan-out. And I would say the produce integration is something in the range of about 10% of the business, that 10% will definitely continue to grow and become far more significant in the next few years. So if we look from the market point of view, we understand the trends and where our customers are going. Definitely, the advanced packaging will continue to be a major portion of our business and will continue to grow.

所以，如果說目前大部分業務都集中在封裝和扇出型封裝上，那麼我認為生產整合大約占到業務的10%，那麼這10%肯定會繼續成長，並在未來幾年變得更加重要。所以，如果我們從市場的角度來看市場趨勢，我們就能了解客戶的需求和發展方向。毫無疑問，先進封裝將繼續成為我們業務的重要組成部分，並將繼續成長。

Next question will be from Gus Richard of Northland. (Operator Instructions)

下一個問題來自 Northland 的 Gus Richard。 （操作員指示）

Can you hear me?

你聽得到我嗎？

Yes.

是的。

I just want to cut your business a little bit differently and think about just applications in terms of 2D, 3D and other applications that are driving your inspection tools. If you give us a little color around that and sort of where you're winning when you think about it in that dimension?

我想稍微換個角度來談談您的業務，從2D、3D以及其他驅動您檢測工具的應用角度來思考。您能否稍微解釋一下，從這個角度來看，您認為您的優勢在哪裡？

Ramy, please?

拉米，可以嗎？

I am trying to think where we are willing to let's say broadly, if we think about . So on the -- those on the advanced packaging, I would say 50% is what we call 3D or the metrology portion, including in the other 50% of the business. This is definitely a business that is -- we started to gain only, I would say, 2 or 3 years ago. So that's definitely an area that we are starting to dominate in the last few years. So I would say this is on the advanced packaging, that these 2 businesses will continue to grow. Now if we look at the other businesses. So if you take for example, 5G. So 5G is driving very strongly, our sales in Image Sensors and it's finding the overall demand in the semiconductor that we see.

我正在努力思考，如果我們考慮一下，我們願意在哪裡，比如說，廣義上說，那麼在先進封裝方面，我想說50%是我們所說的3D或計量部分，包括另外50%的業務。這絕對是一個——我想說，我們在兩三年前才開始獲利。所以這絕對是我們在過去幾年開始佔據主導地位的一個領域。所以我想說，在先進封裝方面，這兩項業務將繼續成長。現在，如果我們看看其他業務。例如，以5G為例。 5G對我們影像感測器的銷售有著非常強勁的推動作用，並且它正在發現我們看到的半導體的整體需求。

If you look at the automotive business, this is coming, we see there the compound saving and the power applications, we see a very strong driver. And again, the overall 2D business is growing, and we are very well entrenched, I would say, in several major providers of this segment. If we continue and move along and look at the cloud, definitely there, it's the memory business, high-performance computing with the heterogeneous integration that will take a big share, again, there, we are very well positioned.

如果你關注汽車業務，你會發現它正在到來，我們看到複合材料節能和電力應用是一個非常強勁的驅動力。同樣，整體二維業務正在成長，我想說，我們在這個領域的幾家主要供應商中已經站穩了腳跟。如果我們繼續前進，看看雲端運算，毫無疑問，記憶體業務、異質整合的高效能運算將佔據很大的份額，在這方面，我們處於非常有利的位置。

And if we talk about the, I would say, the overall business like laptop, tablets, all of the above, then the overall semi consumption affects us very positively. You will see the demands coming from the (inaudible) and the IDMs that we are serving. And again, there, we see the high-performance computing, especially from the high-end portion like the gaming application. So there we gained twice on the memory and also on the heterogeneous integration. So overall, when we look at the different segments of the end products and the different applications that we are supporting, so I think we are well positioned in all of the above. Did I answer you, Gus?

如果我們談論整體業務，例如筆記型電腦、平板電腦等等，那麼整體半導體消費對我們的影響非常積極。您將看到來自我們服務的整合設備製造商 (IDM) 的需求。此外，我們還看到了高效能運算，尤其是在遊戲應用等高階領域。因此，我們在記憶體和異質整合方面獲得了雙倍的成長。總的來說，當我們考察終端產品的不同細分市場以及我們支援的不同應用時，我認為我們在以上所有領域都處於有利地位。我回答你了嗎，Gus？

That's very helpful. And let me try to cut it yet another way. Semiconductor unit growth is roughly 15% this year, it's kind of what people are saying, you're growing 80% in the first half. Clearly, outperformance relative to unit growth. When you think about the applications you address and the growth of those applications versus and new applications versus market share gains, can you attribute your outperformance on a relative basis to those 2 metrics, again, market share gains and outperformance of the applications you address?

這很有幫助。讓我換個角度解釋一下。今年半導體的出貨量成長大約是15%，就像人們說的，你們上半年成長了80%。顯然，相對於出貨量成長，你們的表現非常出色。當您考慮您所針對的應用，以及這些應用的成長與新應用的成長以及市場佔有率的成長時，您能否將您們的出色表現相對地歸因於這兩個指標，也就是市場佔有率的成長和您所針對的應用的出色表現？

So first of all, I understand the question, it's very hard to give you a very quick answer. But definitely, we are gaining market share. And I think in the areas that we are strong in the advanced packaging, definitely we are gaining market share. And I know there are specific customers that switched from the competition to us. So that's definitely to give you whether how many percent of the growth it is, it is very hard to say. But it is definitely significant.

首先，我理解這個問題，很難快速回答。但毫無疑問，我們的市佔率正在成長。我認為，在我們優勢的先進封裝領域，我們的市場份額肯定在成長。我知道有些特定的客戶已經從競爭對手轉向我們。所以，這肯定無法確定成長的具體百分比，很難說。但成長肯定是顯著的。

I think where we are growing in the business and taking market share is the overall inspection business that we didn't participate in the past. If we talk about the compound selling and power area, we never participated there. If you talk about the content, which is, roughly, I would say, 10% of our business, definitely, it's a new business and we are growing, definitely taking market share.

我認為，我們正在業務成長並搶佔市場份額的領域是整體檢測業務，而我們過去從未涉足過這個領域。至於複合銷售和電力領域，我們從未涉足過。至於內容業務，我估計大約占我們業務的10%，這無疑是一項新業務，我們正在成長，並且肯定在搶佔市場份額。

I think we took some market share in the CMOS Image Sensors last year. I'm expecting this to attribute to some of the growth that we'll see this year as well. And so it's definitely a mix between these 2 areas. But it's very hard for me to tell you that 40% will come from there, 40% will come from others. And also, we will end up the year, and we will see where the growth is coming from.

我認為我們去年在CMOS影像感測器領域佔據了一些市場份額。我預計這也會對我們今年的成長起到一定作用。所以，這肯定是這兩個領域的混合成長。但我很難說40%的份額會來自這兩個領域，還是40%來自其他領域。而且，到年底我們才能看到成長的來源。

I think there is one more aspect that we need to keep in mind. A lot of the applications that we are talking require 100% inspection. So the growth of the inspection and the metrology is much higher than the growth of the business or the actual numbers that we see, the 20% that you see in equipment. I think roughly related to it a number of times during the [chip] discussion.

我認為還有一個面向我們需要牢記。我們討論的許多應用都需要100%的檢測。因此，檢測和計量的成長遠高於業務的成長，或者說，我們看到的實際數字——設備成長的20%。我想在晶片討論中，我大致提到過很多次。

And I think this really plays very well to the actual segment that we are serving. If you take, for example, heterogenous integration. This kind of process requires because it's a new process, because it is very complex, it requires a lot of inspection in metrology steps, which play very much into our play, into our growth. So I think it is more complex, but I hope I was able to give enough color into your question.

我認為這對我們服務的實際領域非常有利。例如，異質集成。由於這是一個新流程，非常複雜，因此需要在計量步驟中進行大量檢查，這對我們的業務發展至關重要。所以我認為它更加複雜，但我希望我能夠充分解釋您的問題。

I would like to add one more comment about this. Because when you talk about 15% growth in the semiconductor, I assume you talk about, let's say, number of wafer of equivalent to 12-inch wafers. But actually, we inspect the -- not the amount of wafer, but sometimes we inspect the complexity of the wafers. Assuming that we can see a trend moving from wire bonding to wafer-level package. It's totally different in wire bonding, maybe nobody make an inspection or make simply. When you move to wafer-level package, you do 100% inspection. So technology change, definitely change the demand for inspection machines. You have to consider it.

我想補充一點。因為當你談到半導體產業15%的成長時，我假設你指的是相當於12吋晶圓的數量。但實際上，我們檢測的不是晶圓的數量，而是晶圓的複雜程度。假設我們能看到從引線鍵結到晶圓級封裝的趨勢。引線鍵結完全不同，可能沒人會做檢測，或只是簡單地做檢測。而當你轉向晶圓級封裝時，你需要進行100%的偵測。因此，技術變革肯定會改變對偵測機器的需求。你必須考慮到這一點。

The same is the DRAM -- is the -- when we talk about DRAM, again, moving from wire bonding to 3D IC. All this shifting change the demand for equipment -- inspection equipment.

同樣的情況也發生在DRAM上——當我們談論DRAM時，它又從引線鍵合轉向3D IC。所有這些轉變都改變了對設備的需求——檢測設備——。

The 15% was referring to unit growth, just to be clear. Thank you. That's always very helpful.

15%指的是單位成長率，只是為了更清楚。謝謝。這總是很有幫助的。

We'll now move over to Patrick Ho of Stifel.

現在我們來談談 Stifel 的 Patrick Ho。

Congrats on a nice quarter. I'm not surprised to see the inventory levels increase given the strong demand environment. But maybe Moshe, if you can give a little color whether you're building any inventory given some of the supply chain shortages that are in the ecosystem overall. Is the inventory build, just specifically on the near-term demand? Or are you trying to build a little bit of buffer to ensure that the momentum that you've built over the last few quarters can continue?

恭喜您取得了不錯的季度業績。鑑於強勁的需求環境，庫存水準上升我並不感到驚訝。 Moshe，您能否稍微解釋一下，鑑於整個生態系統中存在的一些供應鏈短缺，您是否正在建立庫存？庫存的建立只是針對短期需求的嗎？還是說，您是在試圖建立一些緩衝，以確保過去幾季建立的勢頭能夠持續下去？

So Patrick, yes, we -- obviously, most of the inventory is for immediate use in the next couple of quarters, but given the shortage in order to be well prepared for the growth beyond that, we are also building inventory of -- certain inventory pieces that we feel that might be in shortage. So there are some elements in the inventory, which relates to the shortage.

帕特里克，是的，我們——顯然，大部分庫存都是在接下來的幾個季度內立即使用的，但考慮到短缺，為了應對之後的增長，我們也在建立庫存——某些我們認為可能短缺的庫存。所以庫存中有一些元素與短缺有關。

Great. That's helpful. And maybe as my follow-up question for Ramy. You gave a lot of good color in terms of the heterogeneous integration, some of the applications there that are driving demand as we look into next year. Can you talk about qualitatively the development work you're doing with a lot of potential customers because -- not only just the heterogenous integration, but a lot of new processes, a lot of new stacking techniques are emerging. And how long does it take in these type of development works to turn it from the engineering side over to high-volume buy for the customer?

太好了，這很有幫助。或許我可以作為Ramy的後續問題。您很好地闡述了異質集成，其中一些應用正在推動明年的需求。您能否定性地談談您與許多潛在客戶進行的開發工作？因為不僅僅是異質集成，還有許多新工藝、許多新的堆疊技術正在湧現。這類開發工作需要多長時間才能從工程方面轉化為客戶的大量購買？

From the customer's point of view, I think you know that these kinds of technologies have been developed for quite a few years. The concepts have been on the drawing room -- development stage for quite a -- I think today, we are in the stage where these technologies are ramping to production. We believe that within 2 to 3 years, they will be very common in the industry and [a jewel] as we talk about high-performance computers will be based on heterogenic integration.

從客戶的角度來看，我想您知道這類技術已經開發了好幾年了。這些概念在繪圖室——開發階段——已經存在了相當長一段時間了——我認為今天，我們正處於這些技術加速投入生產的階段。我們相信，在2到3年內，它們將在業界非常普及，而我們所說的高性能電腦的亮點將基於異質整合。

Today, you already see graphics cards and certain vendors are already using these technologies. The High-Bandwidth Memory is definitely a portion of the heterogenous integration, which used more CPUs by quality of venues. So definitely this is something that is already happening and is starting to move along.

如今，您已經可以看到顯示卡，而且某些供應商已經在使用這些技術。高頻寬記憶體無疑是異質整合的一部分，根據場地品質的不同，異質整合會使用更多的CPU。所以，這無疑是已經在發生並且正在開始推進的事情。

So from our point of view, definitely, there is a lot of development. What we have been doing is here, a lot of hard work is just working with our customers and customers, working with them on the application, and this is something that is ongoing as part of our business. And so this is, I would say, one portion. And alongside, we have a road map, understanding exactly what our customers will need in, I would say, 2 to 3 years. And we are developing products and technologies that will meet their requirements. So I believe that we are well positioned to respond to the market needs in the specific applications that we are a major player.

所以從我們的角度來看，我們確實有很多發展空間。我們一直在努力與客戶合作，共同開發應用，這是我們業務的一部分，並且一直持續發展。所以，我想說，這只是其中的一部分。此外，我們有一個路線圖，能夠準確地了解客戶在未來2到3年內的需求。我們正在開發能夠滿足他們需求的產品和技術。因此，我相信，我們有能力回應我們作為主要參與者所處的特定應用領域的市場需求。

(Operator Instructions) We have a follow-on question from Charles Shi of Needham.

（操作員指示）我們有一個來自 Needham 的 Charles Shi 的後續問題。

Just want to go back to some of the comments. So you said the 55% of the systems installed are (inaudible) advanced packaging (inaudible) . I assume because of a slightly higher 3D metrology in the mix for advanced packaging applications, but revenue contribution's probably slightly higher than that. I wonder for the full year, given that grew total revenue, probably a little bit above your original expectation, whether advanced packaging contribution this year is above the 60% number, this sort of indicated 3 months ago?

我想回到一些評論。您之前說安裝的系統中有55%是（聽不清楚）先進封裝（聽不清楚）。我猜是因為先進封裝應用中3D計量的比例略高，但收入貢獻可能略高於這個數字。考慮到全年總收入的成長，可能略高於您最初的預期，我想知道今年先進封裝的貢獻是否會超過您3個月前預測的60%？

Or is this more approaching 70% for this year? And another one, maybe I would just ask you together, any update on your macro content inspection side of the business? Is it still expecting to grow in line with the corporate growth this year? Or do you expect a slightly outperformance given achievement momentum you're making?

或者說，今年的成長率更接近70%？另外，我想問一下，你們的宏觀內容偵測業務有什麼最新進展嗎？今年的成長率預計會與公司整體成長一致嗎？或者說，考慮到你們目前所取得的成就勢頭，你們預計會略微超出預期？

So I think if you look at -- Charles, I'll start with the advanced packaging. So we started and we said we were about just about 50% this year. And I think this portion will probably grow a little as we move along in the year. I think it will strengthen, we have the potential this year to reach even close to 60%. This segment is very, very strong this year. So I think we will be anywhere between the 55% to 60% this year. That might be a little bit above our expectation.

所以我想，如果你看一下──查爾斯，我先從先進封裝說起。我們一開始說今年的佔比大概在50%左右。我認為隨著時間的推移，這個比例可能會略有增加。我認為它會增強，我們今年有潛力達到接近60%的比例。這個細分市場今年非常非常強勁。所以我認為今年的佔比會在55%到60%之間。這可能略高於我們的預期。

And no doubt with the heterogeneous integration and all the fanout and spending activities, definitely there is a lot of growth in this part of the industry. Regarding the front end and the, what we call, the macro inspection function. I don't know it will outperform. This year, definitely, we are continuing to grow this business. And we are [getting] to new customers. We have broadened our presence. I'm not sure at this stage, if we are going to outperform what we have done in previous year, it will be definitely be in the double-digit in numbers this year.

毫無疑問，隨著異質整合以及所有扇出和支出活動的開展，該行業領域肯定會大幅成長。至於前端以及我們所說的宏觀檢測功能，我不確定它的表現會不會更好。今年，我們肯定會繼續發展這項業務。我們正在獲得新客戶。我們已經擴大了業務範圍。目前我還不確定我們是否會超越去年，但今年的數字肯定會達到兩位數。

We now have a question from Raymond Rund of Shaker Investments.

我們現在有來自 Shaker Investments 的 Raymond Rund 的問題。

I was wondering if you could just give us the quarterly breakdown in revenue by application. If you gave that earlier, I'm sorry, but I didn't hear it?

我想知道您能否提供一下按應用劃分的季度收入明細。如果您之前已經提供過，抱歉，我之前沒聽清楚？

Raymond, we don't provide specific details of the breakdown of the application. But as we've mentioned before, on a very high level, we said that we are around 55% in advanced packaging. And we said around 10% (inaudible) and the rest is all other applications that we support.

雷蒙德，我們沒有提供應用細分的具體細節。但正如我們之前提到的，我們大致說來，先進封裝佔比約為55%，大約佔10%（聽不清楚），其餘的都是我們支援的其他應用。

I believe that ends our Q&A session. Before I hand over back to Rafi for his closing statements, I will let you all know that in the coming hours, we will upload a recording of this conference call to the Investor Relations section of Camtek's website at www.camtek.com.

我們的問答環節到此結束。在將會議交還給拉菲進行總結發言之前，我想先告訴大家，在接下來的幾個小時裡，我們會將本次電話會議的錄音上傳到 Camtek 網站 www.camtek.com 的「投資者關係」板塊。

I would also like to thank Rafi, Moshe and Ramy for hosting this call with investors. I also want to thank all of you for joining this call, and we would appreciate any feedback you have with regard to our new format. And with that, Rafi, I would like to hand over to you for your closing statements. Please go ahead.

我還要感謝拉菲、莫舍和拉米主持本次投資者電話會議。我也要感謝各位的參與，我們非常歡迎大家就我們新的會議形式提出任何回饋。拉菲，接下來，我想把時間交給各位，請大家總結發言。

Okay. I would like to thank you all for your continued interest in our business. Again, I would like to thank all our employees and my management team for their tremendous performance, and we look forward to continue it. To our investor, I thank your long-term support. I look forward to talking with you again next quarter. Thank you, and goodbye.

好的。感謝大家對我們業務的持續關注。再次感謝我們所有員工和管理團隊的出色表現，我們期待繼續保持下去。對於我們的投資者，我感謝你們長期以來的支持。期待下個季度再次與你們溝通。謝謝，再見。